A few years ago on this site I reached out to various bloggers and financial experts to ask what’s in their portfolio. I pursued this because I was curious about their financial goals, investments strategies, and how their approach might differ from my own. Here are the friends and bloggers I contacted:
- Author, blogger, economist – Larry MacDonald portfolio
- Blogger – The Passive Income Earner portfolio
- Blogger – Big Cajun Man portfolio
- Blogger – The Dividend Guy portfolio
- Blogger, financial planner – Robb Engen portfolio
- Blogger, author – Kyle Prevost portfolio
- Blogger, entrepreneur – Richard Garand portfolio
Recently, Richard Garand updated his portfolio with My Own Advisor readers here. Today’s post will take a look into Kyle Prevost’s portfolio to see what’s new or different, and just as importantly why things are different.
Thanks for doing this Kyle. Can you provide me with an update on your investing goals – in one or two sentences?
My savings rate has increased slightly as I pay off some of those annoying early-adult life expenses and my salary increases. My investing strategy and overall goal of early retirement and capital growth hasn’t changed much if at all.
On that note then, can you share your elevator speech on your current investment strategy to realize your goals?
Save as much as you can while still enjoying life, throw the money in a broadly diversified group of investments, then don’t do anything to screw it up by complicating the simplicity.
Simple is good Kyle. Can you list some of your current investments for readers? Why do you own them?
VXUS (Vanguard Total International Stock ETF)
VTI (Vanguard Total Stock Market ETF)
VCN (FTSE Canada All Cap Index ETF)
I own these investments because they are the cheapest way to get exposure to the world’s companies. I don’t know which companies will continue to grow and which will battle headwinds, but I’m pretty sure as a whole, this group of thousands of the world’s largest companies will continue to make money and become more valuable.
What’s changed with your approach or investments over the last couple of years? Why? Why not?
Nothing – because unless you’re a hedge fund manager with access to insider information and super computers then my investment approach is the best one.
Any big financial concerns right now? Why? Why not?
No major financial concerns for me. I guess I’m just a pretty simple guy that doesn’t have much risk in his life. I enjoy living on Canada’s rural prairies where houses can cost as much city parking spots, I have a pretty secure job (teaching), and because I have a strong conviction in my long-term investing strategy I don’t sweat the ups and downs of the market much. To be brutally honest, I don’t even know if the TSX 60 or the S&P 500 is up or down on the year!
What takeaway message do you have for other investors?
Keep it simple – whether that means index investing, disciplined dividend investing or using a robo-advisor. Concentrate on making money and saving money – and let the investing take care itself (with the odd rebalancing act a few times a year of course).
Investing doesn’t have to be complicated; in fact, Kyle demonstrates there is beauty (including financial success) with simplicity. You can follow Kyle (and his partner, Justin Bouchard) on not just one but two personal finance and investing sites:
My University Money You can also obtain a copy of their book More Money for Beer and Textbooks from this site.
Disclaimer: The contents of this post are not recommendations for any individual investor but have been shared to educate readers and provide insight into how other investors are managing their portfolios. My Own Advisor is not a financial professional. Every reader is encouraged to seek help from a financial professional before making any important investment decisions.
Thanks again Mark 🙂 I really enjoyed that second link, pretty interesting observation.
Hey Mark, been a really big fan of your blog for the last few months, and I’ve got a question for you regarding passive investing and indexed ETFs. I’m on the search for the most efficient diversified index ETF portfolios in TFSAs and RRSPs for Canadians (if such thing exists with the amount of new ETFs and ever changing MERs). But so far this is what I’ve invested in is:
TFSA: VSB, XIU, VUN, XEF
RRSP: VSB, VCN, VUN, XEF
I would have put VCN instead of XIU in the TFSA, but it wasn’t available when I started investing. I’m pretty happy with the holdings in the TFSA, but my question for you is about the RRSP account. Do you think it makes sense to hold funds like VTI instead of VUN, and VEA instead of XEF because you can avoid foreign withholding taxes and take advantage of lower MERs? And any thoughts on what your ideal index portfolio inside a TFSA and RRSP would be for Canadians?
All the best
Thanks for reading Jeremy. The way I see it, CDN-listed ETFs that own Canadian stocks are likely a better fit in your TFSA long-term over the RRSP. This is because CDN-listed ETFs that hold US or International stocks, held inside the RRSP, are subject to withholdings taxes that effectively double the cost of the ETF.
Certainly owning VUN and XEF inside the RRSP is very smart, because you don’t need to worry about currency exchange but you get “hit” with higher operational/money management costs. There is no free lunch here 🙂
I have a bias to owning ETFs like VTI and VXUS inside my RRSP, because I need U.S. and international exposure anyhow, and then keeping my TFSA full of CDN-listed ETFs that own Canada (whether that is VCN, XIC, XIU, etc.)
Really though, withholding taxes are just one (small) factor when it comes to investing. Your savings rate and keeping your investing costs low are FAR more important for the next 20-30 years.
Thanks for the insight Mark! And looking forward to future posts.
Hey Mark, one more quick question for you. On top of the diversified index portfolio I’m also wanting to add a DRIP account. What do you think about a DRIP account that only holds Canadian Bank stocks? Mainly CIBC, BMO and RBC, for their stability and high dividend payments. Those 3 stocks have averaged a compound annual return of 14.69% over the last 20 years, and have a solid history of increasing dividends. Also, their dividend payouts are some of the largest of most Canadian companies. Do you think it’s too risky to just own the banks? I’m thinking that if bank stocks are going down in a big way, then most likely so are the other sectors, so is there much point in diversifying into other Canadian dividend paying companies?
All the best,
Happy to answer questions…
Although I’m a fan of indexing, for the reasons you’ve outlined, I started the process of unbundling the ETF XIU for my portfolio many years ago. Meaning, when I looked at the stocks within XIU, or other popular ETFs and the largest equity mutual funds, they never really changed their holdings from year to year to year. This is from a Canadian perspective only mind you.
The second link above is rather telling don’t you think?
In Canada, for the last 20 years to your point, the “top stocks” that the big ETFs and mutual funds hold don’t really change. So I decided many years ago instead of paying a fee to hold those stocks (using a fund), why don’t I own them directly? I pay no fee. I can hold whatever amount I wish vs. an allocation the fund prescribes. I can DRIP whatever stocks I own or stop the DRIP as I wish – and – the best part, I get a good yield/dividend between 3-5% AND capital growth over time.
In terms of owning just Canadian banks, yes, that is risky since that is not diversification. However, if you are intending to own these stocks as a small portion of your portfolio (along with thousands of other stocks from around the world via ETFs or other low-cost funds) then you are reducing your risk.
Only you can make that decision.
Yes, I still owe you a response on this, my apologies, but if you send me another reminder, I will send you the info you are looking for.
Keep it simple worries people as a strategy, but I am really not sure why. Simplicity doesn’t have to mean underperforming, it just must be easy for you to understand and maintain
Yes you do owe me an update! Send when you can AW – anytime later this month is great.